Considering the Pros and Cons of Electric Car Battery Leases
Buy a 2013 all-electric Smart ForTwo ED in Europe, and you’ll be asked if you want to lease the battery pack alongside the car—or own the batteries outright. Buy any one of Renault’s four production electric cars, and you’ll have no option but to sign up for a battery lease. While EV battery rental schemes have not hit U.S. shores, they are commonplace with European electric car drivers.
Even Nissan, which just announced its European pricing for the 2013 LEAF, will offer Europeans a choice between buying or leasing the LEAF’s 24 kilowatt-hour battery pack.
I’m in the privileged position to see things from both sides: the battery pack in my 2011 Nissan LEAF was included in its sticker price. Meanwhile, the battery pack in my 2013 Renault Twizy is leased from Renault for around $76 a month.
Pay for Long-Term Peace of Mind
Examine the battery pack capacity warranty for both cars, and you’ll see a similar figure quoted for the remaining capacity at which battery packs will be replaced.
Nissan warranties the battery to ensure that my LEAF retains at least nine capacity bars for five years or 60,000 miles, whichever comes first. That equates to a remaining battery capacity of 70 percent. If my car’s battery pack capacity falls below that figure in the warranty period, the faulty cells or battery pack will be replaced under warranty.
The same is true for the Twizy. Like all Renaults, the Twizy’s battery pack is guaranteed to retain 75 percent of its original capacity, giving at least some comfort to the buyer.
Here’s where it differs: unlike my LEAF, as long as I keep paying Renault a battery lease fee, the battery pack is warrantied to be better than 75 percent of its original capacity, regardless of how old my car gets.
Even at 10 years old, Renault commits to replacing the battery pack when needed. This could either be a new for old swap, a reconditioned pack, or perhaps even a newer technology pack, improving range over the original model.
Good For Used EV Buyers
Battery leases were designed to lower the sticker shock of electric cars—in the case of European LEAFs, by as much as $7,500. The key is to get consumers interested in taking the electric plunge to see an EV in a favorable light compared to a gas car. The fact that monthly payments go up, because the battery is being leased, can be justified by commensurate lower monthly fuel costs.
Still, with new car battery packs expected to last at least 10 years before replacement, battery leasing may not seem like a great deal for those driving a new car off the dealer lot. That is, until you consider the added value that battery leases offer to buyers of used EVs.
Battery leasing offers reassurance that whatever the age of the car, replacement battery packs—and therefore a guaranteed range and performance—will be covered under the terms of the battery lease. Renault, for example, offers free roadside assistance with its battery lease. It also gives owners access to discounted car hire for those longer trips well beyond the range of an EV.
Good for Automakers and Dealers Too
Dealers and automakers benefit as well. First of all, there’s asset ownership. When new, the battery pack provides a steady stream of money in the form of lease payments. When it is faulty or at the end of its life, the automaker retains ownership of the battery pack and its components, guaranteeing a revenue stream from recycling or reconditioning.
Second, there’s the practicalities of battery replacement. With a customer-owned battery pack, dealers often only replace the faulty cells in a pack. This results in extra training for the dealership, plus extra man-hours carrying out the work.
With a leased battery pack, the automaker can simply ship an entire replacement pack to a dealer once a fault has been identified, making it quicker and simpler for dealerships to simply drop out the faulty pack and lift in a new one. The faulty pack then heads back to the automaker for reprocessing or refurbishment.
Battery Rental, In the Eyes of the Beholder
At the end of the day however, the pros and cons of battery rental will depend on your own personal circumstances. Those in the arid heat of Arizona might find extra comfort in battery leasing, while those in the Pacific Northwest may find it an unwelcome extra long-term cost
As for me? With more than 35,000 miles on my LEAF, I’ve noticed no major degradation in battery capacity. On average, it gets rapid-charged several times a week, and has only ever hit turtle mode once. But I’ll admit: I worry far less about the leased batteries in my Twizy than I do in the battery pack I own in my LEAF.
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